Thoughts of home ownership can weigh heavily on the minds of renters and other prospective home buyers. Many renters are often apprehensive about the financial responsibility of owning a home, even the benefits available to homeowners are very apparent in some markets. Others, may give vital arguments to support the idea that “buying a house especially when you’re younger is an incredibly smart decision financial or otherwise”.

As many economists believed, the renting versus owning argument is more psychological than financial. There are too many variables to assess and compare, and either side can win an argument.

However, this doesn’t mean a number-oriented method is useless in this decision. On the contrary, it is very useful to help you envision the future, make financial plans, and keep pace with your life.

Here is a great tool that you can leverage to help you make a number-oriented decision:
TheUpshot: a handy and powerful tool. The idea is: based on your costs associated with buying a house, the tool can calculate the equivalent monthly rent.


  • Uses a running tally of common expenses as well as opportunity cost of owning versus renting, including home price, mortgage details, appreciation rate, closing cost, initial rental cost, rental deposit & etc. Taxes and mortgage interest costs are also considered. One of the most powerful tools in terms of the complexity and diversity of variables.
  • Data bar allowing smooth drag for users to put in and change numbers instantly
  • User friendly, visually pleasant, and the concept is easy to understand

How to use:

  • Put in the numbers of your ideal home and mortgage details:


  • Don’t forget taxes and maintenance fees:


  • Now the future hold:


  • And finally the renting costs:


  • After you put in all the numbers, the right bar will show you a result like this which is pretty straightforward:RVB5


For example, the home appreciation rate of my town is 7.0% accounting the past 5 years, so I dragged it to 7.0% – after which the rent number turns negative, sending a message “Buying is better, even if you could rent for free. The home pays for itself.”

This is comprehensible – one of the main reasons why people buy homes is to build equity. As long as a home’s value appreciates, it offsets the costs.  But we don’t know what exact appreciation rate will offset all costs and make renting a definite no. Now with this tool, we get this number.While this is a great tool for most people to understand and compare the impact of buying a home versus renting, you’d better use it with caution, and understand there are situations under which this tool is less applicable:

  • Cash pay
  • Rent growth rate is not predicable
  • Maintenance and renovation cost is not predicable
  • Other unpredictable variables such as real estate tax exemptions, inflation rate & etc.


Whether you consider renting is better than buying or the opposite, you’d better not just “consider”, but “calculate”. There is no better way to make financial plan and investment decision based on numbers. Indeed, many homeownership decisions are emotional, and are way more complicated than a formula, but using number and leveraging the power of intelligence can mitigate the risk of reckless decision and ensure a more confident decision. So GIVE IT A TRY.


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